State nuclear plan subsidy faces legal challenge

A coalition of power plant owners is suing to block a new state plan to subsidize the nuclear production of electrical power, claiming it violating federal regulations.

This summer, the state Public Service Commission approved an ambitious clean energy plan that included a separate subsidy program for nuclear plants. which have faced stiff competition from natural gas-powered plants as gas prices drop due to supply glut caused by hydrofracking.

“This a bad deal for New Yorkers, who will see their electric bills go up across the state,” said Jonathan Schiller, a managing partner of Boies, Schiller & Flexner, attorneys for the plaintiffs. “This subsidy will cost New Yorkers as much as $7.6 billion in payments to a single company.”

He continued, “This is illegal. It interferes with the Federal Energy Regulatory Commission’s jurisdiction in regulating wholesale electric rates, and also because the measure unlawfully interferes with interstate commerce … The PSC’s attempt to save these uneconomic New York nuclear plants, ostensibly for their ‘carbon-free’ operations, is misguided. New York would be far better served by supporting investment in modern clean energy and other low-carbon solutions.”

The lawsuit was filed in the Southern District of New York, and plaintiffs include the Coalition for Competitive Electricity, Dynegy Inc., Eastern Generation, LLC, Electric Power Supply Association (EPSA), NRG Energy, Inc., Roseton Generating LLC, and Selkirk Cogen Partners, L.P.

PSC Chairmwoman Audrey Zibelman issued a statement: “The frivolous lawsuit is right out of fossil fuel industry’s playbook to deny and thwart actions to combat climate change. The Supreme Court has repeatedly upheld the rights of states to protect their environment for the welfare to citizens. This challenge to New York’s authority is a challenge to the 29 states that have taken similar actions to encourage renewable energy development. New York’s goal to reduce carbon emissions by 40 percent by 2030 is essential to protect New York and New Yorkers and we will vigorously defend it and are confident of our success.”